Sorting through the information flood for usable knowledge for our farm

Wednesday, July 02, 2008

Levees aren't the only thing about to burst...

Many companies have been reluctant to pass on recent input price increases. They may be running out of time and choices, but a surprising number feel they cannot.

A startling proportion of the executives aren’t sure what pricing policy their companies will follow, suggesting that energy costs and the ongoing credit crunch have made even short-term planning difficult. Fifteen percent of all respondents say that they don’t know if their companies will raise prices during the next six months. Among respondents at public companies and the largest companies,2 the uncertainty is even more acute: 22 and 21 percent, respectively, are not sure if they can raise prices in the near term. Nearly a quarter of those who expect inflation to rise by three percentage points or more aren’t sure if the prices their companies charge will keep pace. [More - with free subscription]

The lack of pricing power means companies erode their profits, something that could show up in the next round of earnings reports. Like it or not, those costs will have to be recovered eventually.

Which leads me to suspect we are witnessing a protracted delay in food price boosts as well. If current economic patterns are any indicator, we will resist price increases until costs simply force them, and then they will continue for much longer than we expect.

What this suggests to me is the food-fuel data will be greatly altered by this time next year.

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About Me

I am a sixth-generation farmer who hold a degree in Chemical Engineering, a minor in Economics, and served as a nuclear engineer from 1970-75.
Jan, Aaron and I farm 2100 acres near Chrisman, IL. Aaron joined our farm operation in 2008.
I have written humor and commentary for Farm Journal and Top Producer for 20 years. I was the host of US Farm Report from 2005 to 2014, and now serve as Commentator.
I speak often to farm and agribusiness groups on topics from risk analysis to professional development.

About Incoming

Incoming is a collection of current thoughts on the nature of the profession of farming from the perspective of a farmer/writer (see full bio here).

It will soon become obvious to readers I lean to the middle, specifically toward pragmatic libertarianism: preserving individual liberty and responsibility. Another strong influence is my education as an engineer. Now throw in 45 years as a husband, 41 as father, and 30 as a choir director. Not to mention a life of farming.

As for the humor... what can I say? Stuff just strikes me as funny. A lot of stuff, actually.

The Internet has filled a hole in my life I never knew existed. These posts are brief summaries of what I am finding and how I feel it will affect my (our) world.

The opinions are my very own. It was not easy to think them up, and nobody else can be blamed for them. In fact, most people around me brace themselves when I start typing or open my mouth.

I welcome comments. I am exceptionally difficult to offend, and have learned to try to rectify mistakes or errors in judgment as rapidly as possible. And I have had plenty of practice.

Thank you for reading.

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Frequently Asked Questions

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